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AI Commercial License Agreement for PixelHair

Introduction

This AI Commercial License Agreement (“Agreement”) is made by and between Yelzkizi (“Licensor”) and the purchasing entity (“Licensee”), herein engaged in or intending to engage in the development and commercial exploitation of artificial intelligence technologies using PixelHair 3D assets (“Assets”). This Agreement is applicable to Licensees initiating their commercial ventures directly with this license or transitioning from an AI Training License.

Definitions

  • “Assets” refers to the PixelHair 3D Hairstyles provided by the Licensor, used by AI models for commercial purposes.

  • “Commercial Exploitation” involves using the trained AI models incorporating the Assets in products, services, or technologies offered to the market for profit.

  • “Net Revenues” means the gross revenues received from the sale of products or services utilizing the trained AI models, less returns, allowances, discounts, and taxes.

  • “Trained AI Models” denotes AI systems or models that have been developed using the Assets, capable of performing tasks that require artificial intelligence.

  • “Effective Date”: refers to the date on which this Agreement is executed by both parties, signifying the commencement of its terms and conditions. In the case of digital acceptance, it is the date on which the Licensee clicks “I Agree” or otherwise signifies acceptance of these terms electronically, or, if not applicable, the date on which the Licensee first downloads, installs, or uses the Assets or receives the Professional Services, whichever occurs first.

  • “Royalty Rate”: The percentage of Net Revenues payable by the Licensee to the Licensor for the Commercial Exploitation of the Trained AI Models, set at 5% of Net Revenues.

  • “Minimum Guarantee”: The annual minimum amount of money guaranteed to be paid by the Licensee to the Licensor as compensation for the rights granted under this Agreement, set at $10,000.

  • “Royalty Cap”: The maximum total amount of royalties payable by the Licensee to the Licensor under this Agreement, set at $300,000.

  • “Buy-Out Option”: An option for the Licensee to terminate ongoing royalty payments under this Agreement by making a one-time payment to the Licensor, set at $150,000, which must be exercised within the first year of the Effective Date.

License Grant

The Licensor grants the Licensee a non-exclusive, non-transferable right to use the Trained AI Models incorporating the Assets for Commercial Exploitation, subject to this Agreement’s terms.

Updates

The Licensor may, from time to time, provide updates or enhancements to the Assets under this Agreement at no additional cost to the Licensee. However, access to such updates is limited solely to the specific Hairstyles initially purchased by the Licensee. The Licensee is eligible to receive and use updates only for Assets they have already acquired under the terms of this Agreement. The Licensor shall inform the Licensee of the availability of any such updates.

Disclaimer of Warranties and Limitation of Liability

The Assets and any associated materials are provided ‘as is,’ without warranty of any kind, express or implied, including but not limited to the warranties of merchantability, fitness for a particular purpose, or non-infringement. In no event shall the Licensor be liable for any claim, damages, or other liability, whether in an action of contract, tort or otherwise, arising from, out of, or in connection with the Assets or the use or other dealings in the Assets. This limitation of liability shall apply to the fullest extent permitted by law.

Financial Terms

  • Royalty Rate: 5% on Net Revenues from the Commercial Exploitation of Trained AI Models.

  • Minimum Guarantee: $10,000 annually, ensuring a baseline compensation to the Licensor.
  • Royalty Cap: A cap of $300,000 on total royalties payable.

  • Buy-Out Option: Available at $150,000 if exercised within the first year of the Agreement, allowing the Licensee to forego future royalty payments.

Commercial Use Terms

The Licensee is prohibited from sublicensing or transferring rights without the Licensor’s consent. Commercial rights are specified for the trained AI models, not for the Assets directly.

Audit Rights

The Licensor reserves the right, upon reasonable notice to the Licensee, to audit the use of the licensed Assets to ensure compliance with the terms of this Agreement. The Licensee agrees to cooperate with any such audit and to provide access to records and information reasonably necessary for the Licensor to conduct the audit. 

Intellectual Property

All rights, title, and interest in the Assets remain with the Licensor. This Agreement grants commercial use rights to the Licensee without transferring any intellectual property rights in the Assets.

Attribution

For any commercial use, distribution, or public display of AI models, products, or services that incorporate or are developed using the Assets, the Licensee agrees to provide clear and conspicuous credit to Yelzkizi as the source of the Assets. This credit shall be included in any user documentation, promotional materials, and product listings where the Assets contribute to the user’s experience or the product’s functionality. The specific format and placement of the credit shall be mutually agreed upon by the Licensor and Licensee, taking into account the nature of the commercial use and standard industry practices.

Term and Termination

This Agreement commences on the Effective Date and continues in full force and effect for a period of five (5) years, with options for renewal, unless earlier terminated as provided herein. Either party may terminate this Agreement upon ninety (90) days written notice to the other party. Upon termination, the Licensee must immediately cease all use of the Assets and destroy all copies. The sections titled ‘Intellectual Property,’ ‘Disclaimer of Warranties and Limitation of Liability,’ ‘Indemnity,’ and ‘Governing Law’ shall survive any termination or expiration of this Agreement.

Terms of Renewal

This Agreement is initially valid for a period of five (5) years from the Effective Date. Upon expiration of this initial term, should the Licensee purchase another asset under this license or continue to commercially exploit the previously licensed Assets, this act will constitute an automatic renewal of the Agreement for an additional term of five (5) years under the same terms and conditions, unless otherwise renegotiated by both parties. This renewal process ensures continued rights for the Licensee to commercially exploit the Assets while providing ongoing compensation to the Licensor. Either party may opt-out of automatic renewal by providing written notice to the other party at least ninety (90) days before the end of the current term.

Indemnity Clause

The Licensee agrees to indemnify, defend, and hold harmless the Licensor and its officers, directors, employees, and agents from and against any and all claims, damages, obligations, losses, liabilities, costs, debt, and expenses (including but not limited to attorney’s fees) arising from: (i) the Licensee’s use of and access to the Assets; (ii) the Licensee’s violation of any term of this Agreement; (iii) the Licensee’s violation of any third-party right, including without limitation any copyright, privacy, or property right; or (iv) any claim that the Licensee’s use of the Assets caused damage to a third party. This defense and indemnification obligation will survive this Agreement and the Licensee’s use of the Assets.

Severability

If any provision of this Agreement is found unenforceable, it will be modified to the minimum extent necessary, with the remainder of the Agreement staying in effect.

Force Majeure

Neither party shall be liable for any failure to perform its obligations under this Agreement if such failure results from any act of God, war, strike, earthquake, pandemic, or any other event beyond the reasonable control of either party (‘Force Majeure Event’). In the event of a Force Majeure Event, the affected party shall notify the other party as soon as practicable, detailing the nature of the event and any anticipated delay in performance. Both parties agree to take reasonable steps to mitigate the effects of the Force Majeure Event. If the event persists beyond (90) days, either party may terminate the Agreement with immediate effect by providing written notice.

Confidentiality

Both parties commit to maintaining the confidentiality of any proprietary information exchanged during the term of this Agreement.

Data Protection and Privacy

The Licensee agrees to comply with all applicable data protection and privacy laws and regulations in the use of the Assets, especially in relation to any personal data processed as part of AI Training or Commercial Exploitation. The Licensee shall implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk of processing involved in their use of the Assets.

Dispute Resolution

In the event of any dispute arising from or related to the terms of this Agreement, the parties shall first seek resolution through direct negotiation. Should these efforts not result in a resolution, the dispute may be submitted to mediation, and if required, to arbitration, all of which shall take place within the United Kingdom. The parties agree to engage in these processes in good faith before initiating any legal proceedings.

Modification of the Agreement

This Agreement may be updated or modified by the Licensor to reflect changes in legal or regulatory requirements, or adjustments to the terms reflecting changes in the Licensor’s business or the technological landscape. Any such modifications will be communicated to the Licensee via the Licensor’s official website or through direct communication. Continued use of the Assets by the Licensee after such modifications have been announced constitutes acceptance of the revised Agreement terms by the Licensee. The Licensee is encouraged to review the Agreement periodically on the Licensor’s website to ensure familiarity with the most current version of the Agreement.

Integration

This Agreement constitutes the entire agreement between the Licensor and the Licensee regarding its subject matter and supersedes all prior understandings, agreements, or representations, whether written or oral. No amendment or modification of this Agreement shall be effective unless in writing and either posted on the Licensor’s website or directly communicated to the Licensee.

Governing Law

This Agreement and all matters arising from it are governed by and construed in accordance with the laws of the United Kingdom, excluding its conflict of law provisions. Any legal actions or proceedings related to this Agreement shall be brought exclusively in the courts of the United Kingdom, to which both parties irrevocably submit.

Acknowledgment

By utilizing the Asset under this AI Commercial License, the Licensee acknowledges agreement to these terms.

Last updated: 15th March 2024.